At Wal-Mart meeting, flash mixes with cash

By IBT Staff Reporter On 06/04/10 AT 11:56 AM

Thousands of Wal-Mart Stores Inc employees gathered in a basketball arena in Arkansas on Friday, looking for big-name entertainment and pep-rally motivation, while shareholders were looking for more cash.

Welcome to the Wal-Mart annual shareholder meeting, where high-powered Hollywood celebrities and musicians entertain 16,000 people. Workers from Walmart and Sam's Club stores and powerful executives like Chief Executive Officer Mike Duke join in the Wal-Mart cheer while telling shareholders about their plans for the company in the coming year.

Those looking for entertainment got Oscar-winning actor Jamie Foxx, who started with a song that celebrated Walmart's price rollbacks and then went into an impersonation of singer and musician Ray Charles.

In a video that introduced Foxx, he looked for his movies in a Walmart video section, while in the cosmetics department, he pointed to makeup ads that featured female co-stars he has kissed on the screen.

Sometimes I just come to Walmart in the makeup section to hang out with my girlfriends, he said.

But shareholders want to hear how the company will jump-start growth in the United States, where sales at discount stores open at least a year have fallen for the last four quarters, analysts said.

They are also interested in a steady payout through higher dividends and share repurchases, one of the main attractions of a stock that has not shown much appreciation outside of the recession, analysts said.

It's a high-quality balance sheet, which is more important today than ever, Janna Sampson, co-chief investment officer of OakBrook Investments, said last week in preparation for the shareholder meeting

The stock's dividend yield is about 2.3 percent, which is a better rate than short-term cash, said Sampson, whose firm holds 488,000 Wal-Mart shares.

Walmart has announced thousands of price rollbacks to attract customers who remain on very tight budgets. It has aggressively cut costs to help fund the rollbacks and increase earnings. Overseas sales have also helped lift results.

While low prices resonate with some customers, those who feel more secure in their jobs have started to shift to rival Target Corp and some department stores to buy more discretionary items like clothing and home furnishings.

At the other end of the spectrum, Wal-Mart faces increasing pressure from dollar stores, which have added food offerings in order to attract customers.

Shares of Wal-Mart were down 1 percent at $51.18 in trading before the market opened.